The iPhone 5 May Have Just Made Mobile Coupons Real

That mythical mobile Starbucks pop up may be coming, courtesy of iPhone's Passbook

By Christopher Heine on September 13, 2012

Of the potential marketing-related features revealed on Wednesday with regards to the iPhone 5, it's the Passbook app should grab the attention of retail chains. It’s a digital wallet[1] that’s meant to compete head-on with Google Wallet[2]. But more interestingly, because Apple’s products are so popular, it could push forward—finally—the long-ballyhooed, shop-with-your-phone, mobile-coupon-future many have been dreaming of.

After Friday's announcements by Apple, Adweek spoke with David Reeves, the vp of 22squared, an Atlanta-based digital agency, to get his take on Passbook’s marketing elements. They’re pretty technical, so please bear with.

Here’s how Reeves—who wears the hat of an Apple-focused developer[3] in addition to digital marketer—broke it down. Theoretically, merchants can code Passbook[4] offers and deliver them via email, Web or within their brand apps. These Passbook items (coupons, discounts, etc.) can be associated with up to 10 locations via latitude and longitude coordinates.

Those coordinates provide Passbook with the ability to offer reminders on a person's home screen, similar to push notifications[5], that an item in his or her Passbook is available for redemption (e.g., coupon) when the consumer nears those designated coordinates. Additionally, merchants can provide updates—through push notifications—to Passbook items without any user interaction required.

So, as mobile marketers have theorized about for more than a decade, iPhone users will be able to walk by the proverbial Starbucks, and yes, the proverbial coupon from Starbucks will appear. Though in this case, Reeves is excited to start using the Passbook technology for Starbucks rival Dunkin Donuts, as well as other retail chain clients like Baskin Robbins and Publix.

“I know I’ve forgotten about coupons for a retailer until after I’ve purchased,” Reeves said. “[Passbook] helps eliminate a lost opportunity for the consumer and for the retailer.”

Adam Kmiec[6], Campbell Soup’s global head of digital and social, via an email also addressed what Passbook means to marketers, particularly consumer-packaged-goods firms and deals companies. “[It] will increase both the adoption and importance of real-time, geo-contextual mobile marketing,” he said. “For CPGs, this will heighten the importance of having strong retailer partnerships. As Apple raises the bar, we'll see the Foursquares, Shopkicks and Groupons of the world up their game. That's a win-win for marketers and consumers.”

If marketers were holding onto the slim hope that the new iPhone would come with a Near Field Communication (NFC[7]) chip, they were let down. Many industry players believe NFC technology promises to digitally connect offline advertising to consumer transactions, following in the footsteps of more progressive developments in the Asian, European and Latin American markets. Various less-popular smartphone brands[6] have included NFC in recent years.

“I am disappointed about no NFC,” said Rachel Pasqua, iCrossing’s mobile lead. “I was hoping to see it come in with Passbook.”

Craig Palli, vp of business development and client services at Fiksu, a mobile apps firm, predicted she won’t have to wait long. “As NFC proliferates with Android devices and becomes more common, you’ll see it in the next iPhone,” he said.

While the wait for NFC goes on, brands were pumped up about the iPhone 5 screen, which come in at 176 pixels taller than the device’s previous versions. That extra real estate is good news for marketers concerned with mobile display ads and landing pages.

“There’s less potential for mis-clicks and more potential to interact with an ad,” said Pasqua from iCrossing. “So you don’t have to take the extra step to a landing page.”

Kurt Hawks, general manager at mobile ad net Greystripe, added via email: "Our studies have shown that full-screen ads are [five times] more effective than banner ads, and expanding the creative canvas on the iPhone 5 is a big advantage to marketers who are looking to deliver an engaging experience to their target customers."